While it has been public for a long time that i) JPM is eager to sell its physical commodities business and ii) the most likely buyer was little known Swiss-based Mercuria, there was nothing definitive released by JPM. Until moments ago, when Jamie Dimon formally announced that JPM is officially parting ways with the physical commodities business. But while contrary to previous expectations, following the sale JPM will still provide commercial gold vaulting operations around the world, it almost certainly means farewell to Blythe Masters.

From the release:

JPMorgan Chase & Co. (JPM) announced today that it has reached a definitive agreement to sell its physical commodities business to Mercuria Energy Group Limited, a global energy and commodities trading company, for $3.5 billion. The all cash transaction is expected to close in the third quarter of 2014, subject to regulatory approvals.

J.P. Morgan will work closely with Mercuria to ensure a smooth transition of commodities assets, transactions, physical trading operations and employees to Mercuria at the close of the transaction.

“Our goal from the outset was to find a buyer that was interested in preserving the value of J.P. Morgan’s physical business,” said Blythe Masters, head of J.P. Morgan’s global commodities business. “Mercuria is a global leader in the commodities markets and an excellent long-term home for these businesses.”

Following the sale, J.P. Morgan will continue to provide traditional banking activities in the commodities markets, including financial products and the vaulting and trading of precious metals – businesses that the firm has been a leader in for years. The firm will also continue to make markets, provide liquidity and risk management, and offer advice to global companies and institutions around the world.

Meet The Mysterious Firm That Is About To Leave Blythe Masters Without A Job

It was about a month ago when it was revealed that the infamous JPMorgan physical commodities group, plagued by both perpetual accusations of precious metal manipulation and legal charges most recently with FERC for $410 million that it had manipulated electricity markets, was in exclusive talks to be sold to Geneva-based Marcuria Group. It was also revealed that Blythe Masters, JPMorgan’s commodities chief, "probably won’t join Mercuria as part of the deal." Of course, we all learned the very next day that Ms. Masters - an affirmed commodities market manipulator - and soon to be out of a job, had shockingly intended to join the CFTC trading commission as an advisor, a decisions which was promptly reversed following an epic outcry on the internet. This is all great news, but one thing remained unclear: just who is this mysterious Swiss-based company that is about to leave Blythe without a job?

Today, courtesy of Bloomberg we have the answer: Mercuria is a massive independent trading behemoth, with revenue surpassing a stunning $100 billion last year, which was started less than ten years ago by Marco Dunand and Daniel Jaeggi, who each own 15% of the firm's equity. And it probably should come as no surprise that the company where the two traders honed their trading skill is, drumroll, Goldman Sachs.

Dunand and Jaeggi first met studying economics at the University of Geneva in the late 1970s. Their friendship was galvanized a few years later working for grain trader Cargill Inc. and sharing an apartment while on a training course in Minneapolis. Mercuria’s corporate strategy and culture have reflected the professional paths of its founders, who spent the bulk of their early careers at investment banks.

They left Cargill in 1987 for Goldman Sachs’s J. Aron unit in London. They stayed until 1994, then joined Phibro for a five-year stint when it was controlled by Salomon Brothers.

That experience defined the trading strategies of Dunand and Jaeggi who moved from Phibro to start Sempra’s European and Asian trading business in 1999 before founding Mercuria in 2004.

Without a commanding position in any region or commodity, the firm has sought out bottlenecks and imbalances in niche markets and positioned itself to make money trading derivatives using insights gained from its physical trading. In its early days it profited by opening a trade route shipping Russian crude to China from Gdansk, Poland.

Mercuria also differs in tone. At its headquarters on Geneva’s poshest shopping street, traders and executives wear open-collared shirts, sweaters and jeans, a sharp contrast to the shirt-and-tie policies at more established firms.

Not surprisingly, some of the key hires in the past couple of years as the firm expanded at a breakneck pace and added some 570 people, bringing its total headcount to 1,200, were from Goldman: "The hires include Houston-based Shameek Konar, a former managing director with Goldman Sachs Group Inc. who is chief investment officer overseeing Mercuria’s corporate development, including the JPMorgan negotiations. Victoria Attwood Scott, Mercuria’s head of compliance, also joined from Goldman Sachs." We find it not at all surprising that the Goldman diaspora is once again showing JPMorgan just how it's done.

So just how big is Mercuria now? Well, it is almost one of the biggest independent commodities traders in the world:

Mercuria traded 182 million metric tons of oil or oil equivalent in 2012, according to its website. Vitol, the largest independent oil trader, handled 261 million and Trafigura traded 102.8 million tons of oil and petroleum products. Brent crude rose 3.5 percent that year in a fourth annual advance. It slipped 0.3 percent in 2013 and is down 2.6 percent this year at about $108 a barrel.

With more trading companies trying to gain an edge by owning businesses that produce, store or process commodities, Mercuria followed suit. It now has stakes in a coal mine in Indonesia, oil and gas fields in Argentina, oil storage in China and a biodiesel plant in Germany. In June, it invested $50 million in a Romanian gas producer.

The JPMorgan unit employs about 600 and represents a range of assets assembled over decades by firms including Bear Stearns Cos. and RBS Sempra, which the bank bought during an acquisition binge beginning in 2008.

They include gas and power trading on both sides of the Atlantic, physical assets spanning 40 locations in North America, an oil-trading book with a supply and offtake contract with the largest refinery on the U.S. East Coast, 6 million barrels of storage leases in the Canadian oil sands, and Henry Bath & Sons Ltd., a 220-year-old metal-warehouse operator based in Liverpool, England.

In other words, the old boys' club is about to get reassembled, only this time even further away from the supervision of the clueless, corrupt and incompetent US regulators. And with the physical commodity monopoly of the big banks finally being unwound, long overdue following its exposure here and elsewhere over two years ago, it only makes sense that former traders from JPM and Goldman reincarnate just the same monopoly in a jurisdiction as far away from the US and Fed "supervision" as possible. Which also means that anyone hoping that the great physical commodity warehousing scam is about to end, should not hold their breath.

As for the main question of what happens to everyone's favorite commodity manipulator, "It hasn’t been determined whether Blythe Masters, who has led the JPMorgan unit since 2006 and orchestrated the buying spree, would join Mercuria, a senior executive at Mercuria said." Which means the answer is a resounding no: after all who needs the excess baggage of having a manipulator on board who got caught (because in the commodity space everyone manipulates, the trick, however, is not to get caught).

Finally, with "trading" of physical commodities, which of course include gold and silver, set to be handed over from midtown Manhattan to sleep Geneva, what, if any, is the endgame?

The talks with JPMorgan forced Mercuria to put another deal on hold. Mercuria was nearing the sale of an equity stake of 10 percent to 20 percent to Chinese sovereign wealth fund State Development & Investment Co., according to two people familiar with the matter. The discussions with SDIC were halted once Mercuria neared the JPMorgan business, one of the people said.

But they will be promptly resumed once JPM's physical commodities unit has been sold, giving China a foothold into this most important of spaces. Because recall what other link there is between China and JPM?

stop this character assassination, it is a waste of energy ... these are small time crooks, mercenaries not worthy of your attention. The fact that they choose wall street as thier field of operations doesnt change that fact. They are not by any means a decision maker.

It is like getting mad at the gun, instead of the person who pulls the trigger ... well, Blythe is still the same, she is not even a gun, just a small time crook ...

As I slam my last espresso of the morning and rush out the door, I wish a hearty go fuck yourself to Blythe** Masters, and wish her an excruciatingly painful death by a 100 self-inflicted pneumatic nail gun wounds in the not-to-distant future.

**With a name like Blythe, you just know her parents were the completely anal-retentive, uppity east coast elite-effete types (or stiff upper lip, butt cheek clenching Brits), who harbored deep & twisted hatred towards each other, and engaged in all manner of moral & sexual depravity-bordering-on-brutality (there are undoubtedly a lot of perverted skeletons in her family's closet - think 'Girl With The Dragon Tattoo').

I guess they can stop buring the bodies now. No one is left to prove they never made a dime and only dug themselves into a giant hole for the Fed to bail out. The last task they had was to dump all that sugar they were storing at that Cargil facility for a loss after they were forced to take delivery of it during some idiotic attempt to corner sugar. Looks like they finished that in Feb.

Am I the only one who does not believe that JPM is out of the commodites business for good......I doubt that....they will just change the name to what they are doing...when you need synethitic derivitives to play witth...commodites are much more fun to play with...and I think they still will..

Every 4-5 years most buy side is forced to change custodians by law or governance process. What that means is JPMs fed backed resign of terror could probably only last 4-5 years. After that, they don't have the Fed's trading accounts to front run and have to deal with their book--Which no doubt is stupid by the end of their term . Just a little fact on why they keep changing the guard on PM manipulation, and the previous "axe" always dies. Maybe it does not apply to the Fed/Treasury. But it is basic to the industry, and I suspect that one way or another, it does happen.

I don't see it being a definite goodbye to Ms Masters. She's for sure got her drop dead money, pun intended. She made the banksters trillions with her twisted inventions, her lack of ethic and morality, so I could visualize her staying there, if for nothing else, cause she's not the only one that knows where numerous skeletons are buried and the others may want to keep her close and on 1st floors, not under construction with nail guns laying about.

Ladies and gentlemen, I present to you the reason that commodity prices have been over inflated from oil to power. Gotta inflate the value of the portfolio for a sale, otherwise the buyers would realize that most of the portfolio is a loss.

She's discovering that it's really a fine line between being "in the money line" to being "in the unemployment line". Rumor has it they have a few openings among the Ho's on 42nd street with full Obamacare benefits. Different kind of whoring, but she should be able to "get up to speed" with some quick illegal deals very quickly and feel right at home. Same skills, different goods delivered to scam so different SIC code, LoL!

Anybody can have any opinion they want about the jews. Just as easy to pick on them as any other ethnic group, they are just too sensitive about being kicked out of Europe and wandering jews always find a new place to be extirpated one more time. That is just too bad.

That's why they're called wandering jews.

Everybody picks on the Norwegians and nobody squawks about that.

Move the jews back to The Pale and forget about them for a few centuries.

They can be fiddlers on roofs for the next thousand years.

Blythe Masters can pick on the jews too, any time she wants. Make it her new job.